Dismissal of Insolvency Application under Section 9 due to Time-Barred Filing

The application under Section 9 of the Insolvency and Bankruptcy Code was dismissed by the National Company Law Appellate Tribunal (NCLAT) as time-barred. The application, filed beyond the limitation period, relied on a civil suit decree pronounced after the limitation period, which was deemed insufficient. The claim of deemed delivery of the demand notice was also rejected due to lack of evidence. Consequently, the application was deemed unfit for admission, and no costs were awarded to either party.

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Issues involved:
1. Whether the application is time-barred and if the limitation in insolvency matters can be saved by a civil suit decreeRs.
2. Can refusal of delivery be considered as deemed delivery under section 8 of the Insolvency and Bankruptcy CodeRs.
3. Whether photocopies of the envelope containing the demand notice can be admitted as valid evidenceRs.

Analysis:

Issue No. 1:
The application under Section 9 of the Insolvency and Bankruptcy Code was filed for initiating Corporate Insolvency Resolution Process against the Corporate Debtor due to non-payment of hire charges for cranes supplied by the Operational Creditor. The default occurred on 31.01.2015, and the application was filed on 16.07.2019, beyond the limitation period. The Operational Creditor relied on a civil suit decree dated 18.09.2018 for recovery, but the decree was pronounced after the limitation period. The National Company Law Appellate Tribunal (NCLAT) has clarified that a decree does not shift the date of default and insolvency proceedings are not for mere recovery of money. Hence, the application was held time-barred.

Issue No. 2 & 3:
The Operational Creditor claimed that the demand notice sent by post was refused by the Corporate Debtor, arguing it should be deemed delivered. However, as per the IBBI Rules, the demand notice under section 8 of the Code must be effectively delivered. The refusal of delivery cannot be accepted as deemed delivery under the Code. Without the original envelope for verification, the claim of deemed delivery was not substantiated. As the application was time-barred and lacked proof of effective delivery of the demand notice, it was deemed unfit for admission.

In conclusion, the application was dismissed as it was time-barred, and the claim of deemed delivery was not supported by sufficient evidence. The Registry was directed to communicate the order to both parties, and no costs were awarded.

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